Citation Nr: 0813209
Decision Date: 04/22/08 Archive Date: 05/01/08
DOCKET NO. 05-37 034 ) DATE
)
)
On appeal from the
Department of Veterans Affairs (VA) Regional Office (RO)
in Columbia, South Carolina
THE ISSUE
Entitlement to waiver of recovery of an overpayment of
disability compensation benefits, in the calculated amount of
$17,652.13, to include the validity of the debt.
REPRESENTATION
Appellant represented by: John S. Nichols, Attorney
ATTORNEY FOR THE BOARD
M. Vavrina, Counsel
INTRODUCTION
The veteran served on active duty from July 1970 to July
1990.
This matter comes before the Board of Veterans' Appeals
(Board) on appeal from a February 2005 decision issued in
March 2005 by the Committee on Waivers and Compromises
(Committee) at the RO, which denied a request for waiver of
recovery of compensation overpayment calculated in the amount
of $17,652.13. As explained below, the underlying issue in
this case concerns the propriety of the creation of the debt
in the first place. That issue must be decided before the
waiver issue can be addressed; therefore, the Board has
recharacterized the issue on appeal as described on the title
page.
In his substantive appeal (VA Form 9) received in October
2005, the veteran requested a hearing before a Veterans Law
Judge of the Board at the RO (Travel Board hearing). A
Travel Board hearing was scheduled for March 8, 2006;
however, the appellant failed to appear on the scheduled
hearing date. In view of the circumstances of the following
remand, if this matter is ultimately returned to the Board
for appellate review, the veteran is free to request another
Board hearing.
For the reasons expressed below, the matter on appeal is
being remanded to the RO via the Appeals Management Center
(AMC), in Washington, DC. VA will notify the veteran when
further action, on his part, is required.
REMAND
Initially, the Board notes that the evidentiary record
indicates some of that the assessed indebtedness in question
may have been recouped. Nevertheless, in accordance with
Franklin v. Brown, 5 Vet. App. 190 (1993), the Board must
consider the entire amount calculated, plus interest.
Preliminary review of the record in this case indicates that
the overpayment in issue resulted from a retroactive
termination of the veteran's disability compensation benefits
from December 27, 2001 to May 23, 2004 based on information
received by the RO that there was an outstanding warrant
issued by the Cayce Police Department in South Carolina for
the veteran on February 7, 1999. The provisions of
38 U.S.C.A. § 5313B (West 2002) specifically prohibit the
payment of Chapter 11 compensation benefits for any period
during which a veteran is a fugitive felon. The term
"fugitive felon" means a person who is a fugitive by reason
of (A) fleeing to avoid prosecution, or custody or
confinement after conviction, for an offense, or an attempt
to commit an offense, which is a felony under the laws of the
place from which the person flees, or (B) violating a
condition of probation or parole imposed for commission of a
felony under Federal or State law. 38 U.S.C.A. § 5313B; 38
C.F.R. § 3.665(n)(2) (2007).
In a March 2004 letter, the RO informed the veteran that VA
had been advised by law enforcement authorities that he had
been identified as a fugitive felon because he was the
subject of an outstanding warrant and gave him an opportunity
to clear the warrant with the agency that issued it or to
advise VA if he believed that VA had identified the wrong
person. The RO instructed him to contact the Cayce Police
Department as soon as possible to determine what must be done
to clear the warrant and, when that had been accomplished, to
send official documentation establishing that the warrant had
been cleared to the RO. If VA did not receive evidence
establishing that the warrant had been cleared within 60 days
of the date of the letter, the RO informed the veteran that
VA was required to stop his compensation benefits as of
December 27, 2001, the effective date of the fugitive felon
provisions, and that he could request a hearing or submit
further evidence. This letter was not returned as
undeliverable; the veteran did not respond.
The RO sent the veteran another letter dated June 24, 2004,
indicating that VA proposed to stop his compensation payments
effective December 27, 2001, because the RO had received
evidence that he had been identified as a fugitive felon.
The VA proposed to adjust the veteran's payments after 60
days, during the interim the veteran could request a hearing
or submit evidence that VA should not make the adjustment.
The RO added that any adjustment would likely result in an
overpayment. This letter was not returned as undeliverable;
the veteran did not respond.
In a letter dated June 29, 2004, the RO terminated the
veteran's compensation payments effective December 27, 2001,
based on the veteran's identified status as a fugitive felon
and advised him of his appellate rights.
In a September 30, 2004 letter, the RO notified the veteran
that his compensation payments had been resumed as of May 23,
2004, the date of the veteran's arrest, because he was no
longer considered a fugitive felon and that termination of
his compensation had created an overpayment.
In a statement dated and received on November 10, 2004, the
veteran indicated that this decision had created an
overpayment of $12,948 and that he wanted to appeal the
decision. In support, the veteran stated that he was found
"not guilty" by the court on June 10, 2004 and he felt that
he was being punished by VA for an offense that he did not
commit. Eight days later, the veteran submitted a VA Form
5655, Financial Status Report, which was construed as a
request for a waiver of overpayment.
In a letter from the VA Debt Management Center (DMC) to the
Committee on Waivers and Compromises, dated November 24,
2004, it was reported that the debt considered for waiver was
$17, 652.13. This document also indicated that the first
letter to the veteran, evidently informing him of the
creation of the debt, was sent on July 11, 2004. The Board
observes that a copy of this July 11, 2004 notice is not of
record.
A February 2005 audit also shows that the original amount of
overpayment as $17,652.13. It also determined that the then
current overpayment balance was calculated as $10, 221.99.
In a February 2005 decision issued in March 2005, the
Committee denied the veteran's waiver request, noting that he
was at fault in the creation of the debt as records indicated
that the veteran's criminal activities caused the debt and no
extenuating circumstances were presented to the Committee.
In a June 2005 notice of disagreement and an October 2005
substantive appeal, the veteran's attorney argues that: (1)
the veteran was not in fact a "fugitive" as he was always
living at the same address, his whereabouts were known at all
times by the law enforcement agency, there was no attempt on
his part to avoid service of the warrant, and he, in no sense
of the word, fled from the authorities; (2) the charge that
was contained in the warrant was not a "felony" under state
law as high misdemeanors are not recognized by South
Carolina; and (3) the veteran was not a "fugitive felon" as
defined by 38 U.S.C.A. § 5313B, because he was not charged
with a felony, there was no evidence that he was "fleeing to
avoid prosecution, or custody or confinement" after
"conviction" because he was found not guilty at a bench
trial. The veteran's attorney concluded that the warrant was
baseless, and should never have been issued, and that, during
the five-year period between issuance in 1999 and RO
notification in 2004, the Cayce Police Department never tried
to serve it. In addition, the attorney added that VA had
been garnishing $917 monthly from the veteran's compensation
payments to reduce the debt, which has worked an extreme
hardship on the veteran and his family making him unable to
meet their basic needs.
The underlying argument continuously advanced on behalf of
the veteran is that an overpayment should not have been
created because he was not in fact a fugitive felon as
defined by 38 C.F.R. § 3.665(n)(2), and if the debt is found
to be valid, the amount of the debt. As such, the appellant
has consistently challenged the validity of the debt.
The Court has held that when the validity of the debt is
challenged, a threshold determination must be made on that
question prior to a decision on the waiver of indebtedness.
See Schaper v. Derwinski, 1 Vet. App. 430, 437 (1991). A
debtor may dispute the amount or existence of a debt, which
is a right that may be exercised separately from a request
for waiver or at the same time. See 38 C.F.R. § 1.911(c)(1)
(2007); see also VAOPGCPREC 6-98. The propriety and amount
of the overpayment at issue are matters that are integral to
a waiver determination. See Schaper, 1 Vet. App. at 434. As
such, the Board believes that further action by the Committee
to determine whether the creation of the debt at issue was
proper and, if so, the correct amount is needed prior to
further appellate consideration.
The Board reiterates that the veteran's claims file does not
contain a copy of the letter from the VA Debt Management
Center (DMC), supposedly dated July 11, 2004, informing the
veteran of the amount of his indebtedness. On remand, VA
must obtain copies of all available records related to the
matter on appeal to include a copy of the DMC letter
notifying the veteran of the amount of the overpayment
incurred and his right to request a waiver, and set forth a
written paid and due audit of the veteran's compensation
benefits for the period of the overpayment.
In determining whether the debt was proper in this case, the
RO should consider VA Office of General Counsel opinion,
VAOPGCPREC 7-2002, which noted that the VA fugitive felon
provision was modeled after Public Law No. 104-193, which
barred fugitive felons from receiving Supplemental Security
Insurance from the Social Security Administration (SSA) and
food stamps from the Department of Agriculture. In that
opinion the General Counsel noted that Public Law No. 104-193
"was designed to cut off the means of support that allows
fugitive felons to continue to flee." Id. As the veteran
was not convicted of a felony in this matter, and there is no
contention that he has violated the conditions of a parole or
probation, the only definition of fugitive felon that may
apply in this case is the one providing that a fugitive felon
is a person "fleeing to avoid prosecution" for an offense
or an attempt to commit an offense that is a felony under the
laws under the place from which the person flees.
Accordingly, further appellate consideration will be deferred
and the case is REMANDED for the following action:
1. Obtain, and associate with the claims
file, copies of all available records
related to the matter on appeal held by
the VA Debt Management Center (DMC), to
include a copy of any letter to the
veteran notifying him of the amount of
the overpayment incurred and her right to
request a waiver. See OF BULLETIN
99.GC1.04 (May 14, 1999).
If a copy of this letter cannot be
obtained, the RO should, to the extent
possible, obtain from the DMC (1)
verification in the form of a signed,
written certification from the DMC
identifying the date of dispatch of the
initial notice of indebtedness and right
to request waiver, and when and where it
was sent and whether it was returned as
undeliverable; and (2) a printout of the
screen from the Centralized Accounts
Receivable Online System (CAROLS) that
reflects the date of dispatch of the
DMC's initial notice to the veteran with
a statement that explains the details of
the screen and a copy of the type of form
letter sent to the veteran. The VA
should document its efforts to obtain
these records.
2. Following completion of the above,
the RO shall produce a written paid and
due audit of the veteran's compensation
account for the period of the
overpayment, from December 27, 2001 to
May 23, 2004. This audit should reflect,
on a month-by-month basis, the amounts
actually paid to the veteran, as well as
the amounts properly due. A copy of the
written audit should be inserted into the
claims file and another provided to the
veteran and his attorney.
3. The Committee should then adjudicate
the issue of whether the overpayment of
compensation benefits at issue was
properly created, including consideration
of whether the overpayment was due to
sole VA administrative error, and the
amount of any overpayment. In
particular, as the veteran was found not
guilty, the Committee should address
whether the veteran is a fugitive felon
as defined by VA law and regulation, that
is, is a person "fleeing to avoid
prosecution" for an offense or an
attempt to commit an offense that is a
felony under the laws under the place
from which the person flees. A
comprehensive explanation of the
Committee's reasons and bases for that
decision should be prepared and
incorporated into the claims file, to
include a discussion of any information
obtained from the Cayce Police Department
and the veteran or his attorney. If it
is determined that any or all of the
overpayment at issue was improperly
created, award action should be taken to
rectify the error. In any case, the
veteran and his attorney should be
informed of the decision made and should
be allowed the requisite period of time
for a response.
4. Thereafter, if an overpayment is
found to have been properly created, the
veteran should be allowed an opportunity
to submit additional evidence pertinent
to his request for waiver of recovery of
the assessed overpayment, including a
complete financial status report, citing
all current income, expenses, and assets.
5. After the actions requested above
have been completed, the case should be
referred to the Committee to review the
record and reconsider the veteran's
request for waiver pursuant to the
principals of equity and good conscience.
A formal, written record of the
Committee's decision, including an
analysis of the various elements to be
considered, should be prepared and placed
in the claims file. A supplemental
statement of the case (SSOC) is not the
appropriate means for accomplishing this
task, under proper appellate guidelines.
6. If the Committee's determination
remains unfavorable to the veteran, he
and his attorney should be furnished an
SSOC, which specifically addresses the
issue of creation of the overpayment and
which contains a recitation of the
pertinent law and regulations governing
the issue of proper creation, including
38 U.S.C.A. § 5112 (West 2002); 38 C.F.R.
§ 1.965(a) (2007). This document should
further reflect detailed reasons and
bases for the decision reached.
When the above development has been completed, the veteran
should be afforded the opportunity to respond thereto.
Thereafter, the case should be returned to the Board for
further appellate consideration, if otherwise in order. The
purpose of this REMAND is to afford due process; it is not
the Board's intent to imply whether the benefits requested
should be granted or denied. The veteran need take no action
until otherwise notified, but he and his attorney may furnish
additional evidence and/or argument during the appropriate
time frame. See Kutscherousky v. West, 12 Vet. App. 369
(1999); Colon v. Brown, 9 Vet. App. 104, 108 (1996); Booth v.
Brown, 8 Vet. App. 109 (1995); Quarles v. Derwinski, 3 Vet.
App. 129, 141 (1992).
The appeal must be afforded expeditious treatment. The law
requires that all claims that are remanded by the Board of
Veterans' Appeals or by the United States Court of Appeals
for Veterans Claims for additional development or other
appropriate action must be handled in an expeditious manner.
See 38 U.S.C.A. §§ 5109B, 7112 (West Supp. 2007).
_________________________________________________
JONATHAN B. KRAMER
Veterans Law Judge, Board of Veterans' Appeals
Under 38 U.S.C.A. § 7252 (West 2002), only a decision of the
Board of Veterans' Appeals is appealable to the United States
Court of Appeals for Veterans Claims. This remand is in the
nature of a preliminary order and does not constitute a
decision of the Board on the merits of your appeal.
38 C.F.R. § 20.1100(b) (2007).